tv The Hill Holds Forum on Prescription Drug Costs CSPAN July 24, 2017 8:08pm-10:08pm EDT
then david hawkings of cq roll call will discuss congressional pay and benefits. be sure to watch c-span's washington journal live at 7:00 a.m. eastern tuesday morning. join the discussion. >> c-span, where history unfolds daily. in 1979, c-span was created as a public service by america's cable television companies and is brought to you today by your cable or satellite provider. next, members of congress and industry experts discuss prescription drug access and costs. fda commissioner scott gottlieb looked at his agent's role in improving the process. held by the hill, this is two hours.
welcome to this morning's briefing, prescription drug system, ensuring access. i'd like to thank our sponsor, the coalition, for affordable prescription drugs for making this possible. this is the first in a series of two events sponsored by the coalition to explore some of the most pressing issues facing the u.s. health care industry. this morning we are focused on the cost of medicine. in the united states, expenditures on prescription drugs are rising faster than overall health care spending. reacting to the concern over rising prices, the white house is expected to unveil an executive order examining ways to reign in drug costs. even as we wait for direction
from the government, how can every entity within the prescription drug delivery system help manage costs and keep medicines accessible for all americans, and what innovative market-based solutions are being ex "morning drive" oh plord and what role can government play? we hear from stakeholders as they explore a landscape where patients can get the medicine they need at a price they can afford. a few notes of housekeeping. in addition to those of you here in the studio, we are live streaming on thehill.com. we ask that you keep your phones on silent but we encourage you to join the conversation on social media. follow us on twitter @thehill events and comment using the hashtag what's next. please keep an eye out for members of the team who have hand held mics. finally there's a very short survey on your chairs.
we would love your feedback. feel free to give those to a member of the staff on your way out. i'd like to invite meghan scott, executive director of the coalition to make some brief remarks. meghan? >> good morning, everyone. thank you, johanna, and thanks to the hill for hosting this very important conversation today. we appreciate the distinguished speakers and panelists and all of you here in the room and those of you watching online. we know that this is a pretty slow time in washington for health care and there's nothing else that you could possibly be focused on, so thanks for being here. all kidding aside, a serious solutions-orient solutions-oriented conversation about the issue of rising drug prices and the effect they have couldn't be more timely. we're pleased to have representatives from across the
drug supply chain as well as a representative of the patients who rely on those drugs. addressing the ongoing challenge is one that deserves a substantive dialogue and cooperation across the entire health system. to that end i'd like to share with you just a little bit about who the coalition for affordable prescription drugs is, who our members are and why we've come together now. we bring together employers, unions, public sectors retirees and other stakeholders. these organizations know first hand the real value that these partnerships allow them to provide to their members through sustainable, affordable prescription drug coverage for their employees and members. the issue is front and center for many employers and unions because about half of all americans get their coverage through the employer system, far more than any other source of coverage. amid these rising drug prices, employers and unions have had to find ways to ensure that their
employees, members and their families are able to access the medicines they need. that's why more and more sophisticated purchasers have been choosing to partner with pbn. kormd to a survey in 2009 of more than 250 employers, 2009 only 47% of employers were partnering with pbn to manage these benefits. as drug prices continued to rise, four years later you saw that number hit about 61% so these organizations are really working to find ways to ensure that their employees and members have access. while the average list price grew by nearly 10%, the average net growth was held to around 3%. that's real savings that are being driven through negotiations with manufacturers. pbns are also essential to the affordability and sustainability of government programs. a recent study found that they'll save medicare part d
$896 billion over the next ten years and without it seniors would be looking at premiums that are about 66% higher. beyond the savings generated by negotiations with manufacturers, pbns deliver value to the health system by building high quality pharmacy networks and reducing point of sale prices through negotiations with pharmacies, use their deep clinical expertise to encourage the use of the safest, most effective medicines including generic and alternatives that can achieve the same health outcomes often at lower cost and provide patient focused programs and tools aimed at improving health outcomes and avoiding unnecessary costs such as hospitalization. it's very appropriate, as johanna said, that the hashtag for today's event is what's next rx because it's time to find solutions. sound approaches that will ensure access and improved clinical outcomes within an affordable and sustainable
framework. we believe that solutions should build on what is already working for the government programs, employers, unions and other organizations that most americans rely on for their health coverage. there's an immense opportunity to encourage the most efficient and effective use of medicines to both improve health outcomes and to significantly reduce unnecessary health care spending in both the public and private sectors. finally, we need to do things that will increase competition for prescription drugs by facilitating use of generics, by identifying off patent drugs with little or no competition and by taking a closer look at anti-competitive practices. when there's greater competition, patients, employers and taxpayers all benefit. so again, a big thank you to the hill for hosting this important conversation today. with that, i'm going to turn it back over to johanna and we will get things started. thank you all. [ applause ]
>> we begin this morning with a conversation featuring two democratic members of congress from the committee that oversees matters related to health care. congressman gene green of texas is the ranking member of the house energy and commerce subcommittee on health, and congresswoman diana degette is the ranking member of the submity an oversight and investigation. joining them is my colleague, the hill's national correspondent reid wilson. reid? >> grandmothood morning. thank you all for being here this morning. we're going to chat a little bit about the cost and transparency of prescription drug prices and then open it up to your questions as well, so if you've got questions there will be people with microphones all around looking for you with your hand up. but i want to start with you, congresswoman degette, what role
does congress play in increasing transparency for drug prices? >> particularly our committee, the energy and commerce committee, we have jurisdiction over all of the issues of patent exclusivity and availability of drugs and medicare part d. we basically have jurisdiction. so people like gene and i think that what we should be doing is really having some in depth investigations and hearings to figure out why all of a sudden high prices of prescription drugs seem to be pervasive everywhere, and we've been urging our colleagues on -- our majority colleagues on the other side of the aisle to have a robust investigation in hearings. it's not just a simple issue of prescription drugs are going up, let's reduce the prices. it's a -- as we just heard, it's a very complex system that seems to be growing more complex and also more opaque by the day.
so, we think that congress needs to take a very active role. >> mr. green? >> i agree, and of course we're democrats so they don't let us call hearings, but i would have an aggressive hearing schedule of our health subcommittee on a number of issues. i'd like us to work with cms more and make sure we don't create another issue but also drug prices to see where we could get some of the really things is venture capitalists coming in and then raising the price astronomically. not a dime of that goes into research but again we don't want to dry up investment in research because that's how we're going to discover these new cures. since diaane and chairman upton with the sponsors, we want to continue that over the next number of years, that intensity
with fda funding, obviously nih fund funding. the first two years, appropriations give us $2 billion. our goal is $10 billion over five years of new research at nih. >> you bring up this interesting balance between profit for the company that then go into research and transparency and lower costs for the consumers. how do you strike that balance? >> i don't think we've figured out how to strike that balance. otherwise we would have the green/degette solution which we frequently do, but this morning we don't have that to present. but it seems that as the system has grown more complex, your previous speaker talked about the very complex system where
you have patients. obviously you have employers. you have unions. you have insurance companies. you have pbms. you have pharmacies and then of course the pharmaceutical companies themselves. you have this very complex system and each step it seems that there's negotiation and there's rebates, and then overlaid over all of that is the drug research, the patent exclusivity and the development of new and exciting drugs, biologics and other drugs that are really presenting new and innovative cures for people. so it's really difficult, especially when we haven't had any investigations or hearings to determine exactly what that causes or what the solution would be. congressman tom reid from new york and i are the co-chairs of the congressional diabetes caucus, and of course one of the
drugs that has just sort of inexplicably skyrocketed in price is insulin. so we've sort of undertaken a little mini investigation of our own at using insulin as a case study to try to figure out how is it insulin which obviously every type one diabetic and many type two diabetics rely on, how is it that it's suddenly spiked up in price. so what we've been doing, we've been systematically talking to representatives from every one of these interest groups that i just mentioned and of course it's always someone else's fa t fault. what we're trying to do is get a full picture and as i say, we're trying to convince the chairman, greg walden of the full committee and also our respective subcommittee chairs to have a series of investigations and hearings, and
we could use insulin pricing as an example, but it's not so clear exactly what you do at this point. i think gene would probably agree. >> yeah. insulin is a good example of it but when you see some of the market forces that happen and i think we can agree on a bipartisan basis that we need to make sure that we don't see that kind of jump in price just because someone can go buy the patent. again, that doesn't help the system. it just raises the price for the consumers. >> so as congress now appears to be moving towards a bipartisan fix of the affordable care act or at least some kind of bipartisan negotiation, what role does -- what role would you like to see pharmaceutical pricing play in some kind of next version of the aca? is that something you address in
that kind of legislation? >> i would hope that's where we're going to go to. i know there's been a push in the senate for a bipartisanship. i did a one minute yesterday morning on the floor saying we don't have a democrat or republican solution but we need to sit down across the aisle and have an american solution for health care. that would be all encompassing. obviously access is important. where i come from, i want my folks to be able to go to some of the great medical facilities at the texas medical center in houston, but they have to have some type of vehicle, whether it be through their employer, through the exchange or through medicaid. again, one of my sticking points is that we shouldn't have allowed states not to take the whole medicaid. i know the supreme court decision. that wasn't in our bill. it was actually the senate bill, but in my district, 46,000 of my constituents would get medicaid
if the state had expanded, 100% reimbursement for three years, 90%. typically in texas our medicaid reimbursement is two-thirds fed and one-third state. so 98 to 10 is really a good deal to serve that many more people. so access, but then we want to make sure they can get to those great facilities that we have. >> so maybe you have some information we don't have about bipartisan negotiations on the affordable care act, but i will say as gene mentioned, i worked with fred upton, the former chairman of energy and commerce, for three years to develop 21st century cures and gene and i both believe that the best legislation is bipartisan legislation. we've been trying to convince our colleagues in the house to work in a bipartisan way on health care reforms because we realize that the affordable care act, while it's provided
opportunities to millions of americans, it also needs improvement. and i identified ten areas where i think we could research it on a bipartisan way. one of them was prescription drug pricing. so far though, despite our many approaches, we have not seen any appetite on the part of the republicans in the house to work in a bipartisan way, which i think is unfortunate because i think all of these solutions will have to be bipartisan. >> and probably the best example, we can do it. 21st century cures in the house is overwhelmingly bipartisan. all of us work like diane works on diabetes with tom reid. john and i work on the next generation of antibiotics that we wanted to gain. in fact, with the legislation going to the senate, we were trying to see how we could jump start that medical research into that new antibiotic-resistant
illnesses. chairman burgess and i worked together on trauma care, so we can do it. we just need to look at it. we did it really great on cures but now with what's happened in the senate and i would hope we would do that really bipartisanly on how we're going to provide health care to americans. >> gotcha. someone proposed requiring pharmaceutical companies to explain their drug pricing models. is that something that would help the market? >> i think transparency is important, although we also know anyone who has a patent or -- they may not want to share some of it so they could have a knockoff coming on. but i think transparency and drug pricing so people will know and even the physicians will know that when they're -- if they have an array of drugs for a certain illness, they would know this is, you know, the cost. but the goal should be you need to prescribe the most effective
for your patient, and that's what doctors should do. but i think the transparency would help both on the end result but also for employers and unions who have plans. >> a couple of things i think we need to investigate in pursuit of this transparency is we need to investigate the current exclusivity rules and if they're appropriate, because as gene says, we really want to encourage development of new therapies and new drugs. some of those take years to develop and many, many hundreds of millions of dollars to develop. so we need to recognize that on the one hand, but on the other hand, we need to see if there are adequate generic drugs being developed that will give price competition, and we also need to have the transparency to see if
the pricing really is in line with what these drugs cost to both research and to produce. finding a legislative solution to that is not easy and you can't just take your magic wand and develop a formula or something like that. when we don't even have the information yet because we haven't had -- it all goes back to the investigation and the hearings. i would be really loathe to start slating before we actually have that. call me crazy but i think we should have the information before we actually legislate. >> surprise surprise. >> i know, it's crazy. that's where i think it would really benefit. and it's not a partisan issue because we all support the development of new drugs and therapies and we all support access for patients for those drugs and therapies. but from the insulin end, i know
we have some new and very targeted and excellent insulins, but those aren't going to do any good if the formulary doesn't offer those insulins and parents of diabetic children have to decide whether they're going to spend hundreds or thousands of dollars a month because their insurance plan won't cover that insulin. >> the white house is reportedly working on an executive order to deal with drug prices. what would you like to see them do? >> i can hardly wait to see that. >> and what do you think they'll do? >> they don't call us first, believe it or not. >> i would like to see leadership out of the white house. but again, you can't jump from one issue every day to something else so you have to have some continuity. i think that would help us if we got that kind of leadership out of the white house to sit down and say, okay, let's see what we can do to get -- accomplish some
of these goals. again, it's not going to be done in one session of congress. the cures took three years. >> three years. >> and so it's something we have to get started on and have buy-in from everybody. >> we've heard as well proposals to cut various regulations to speed generics or new drugs to market. where do you see the balance between cutting the regulations to increase the access and protecting patients in the long run? >> well, i think we need to look at both and cures is part of that. one of our issues with the fda was that it takes such a long period of time to do -- to get from the lab table to the bedside. cures gave the fda over a period of five years half a billion dollars, but also to streamline and prioritize some of those pharmaceuticals that need to be
on a fast track. i'll give one example. fda can do it. when we had the ebola scare three years ago, there were u.s. citizen doctors who were being treated and i asked one of the doctors, i said, what would happen if that doctor who was aware had the knowledge to do, if there was something and that y'all could try that. and i was told it took the fda 24 hours to get permission -- for them to get permission to administer that. the sad part is they don't know if that pharmaceutical helped with the treatment or the survival but there just needs to be more tests on that. the fda can move, and we just want to make sure they take on some of the more terrible illnesses, and obviously diabetes is one of them that costs so much.
>> but also we have the breakthrough therapies bill that we passed some years ago. and that's been extremely successful in helping companies get therapies on a fast track at the fda for approval and it's targeted at therapies for diseases that we don't have treatments for. but i think encouragement of generics is always really important because that does give the competition -- as i said earlier, we really have two issues. one of them is that some of the -- it's really easy to develop a generic for aspirin. it's a lot harderiologic therap have to develop equivalent generic solutions. secondly, some of the expense of treatments are being developed for diseases that affect a relatively small population, not
really rare diseases but a relatively small population. and so it's economically not feasible to develop a generic, and we need to figure out how to incentivize competition in those areas too. on the one hand already we're incentivizing the development of any treatment for some of these diseases, and we have to figure out how we can do the same so we can have competition. >> i've got one more and then we're going to turn to the audience, but congressman, you mentioned exclusivity and that's obviously a major part of this whole conversation. what do you do about the life span of a patent and just how long one company can keep a stranglehold on one drug? >> this is a very lengthy and complex conversation that we had when we did 21st century cures. what we need to try to do is find that sweet spot where you're giving patent exclusivity for a period of time that really
incentivizes and encourages people to develop these therapies. on the other hand, you want to make sure that it's not so long that people essentially get a monopoly over that drug and then they have no incentive to keep the price low. study after study has shown where you've got a generic alternative that brings the price down. so we continue to work and rework those. there's a number of patent exclusivity provisions in law right now. we had a very small one in 21st century cures but there's that continuing dialogue and pressure around that. again, there's no silver bullet around that. >> as members of congress we have two levers to increase funding, and we need both public funding for nih but the private sector funding from pharmaceuticals, exclusivity is one of those levers but just
federal money going into nih and you have to be careful because both of them are so sensitive. it's hard to get money but it's also a lot of members have some real concern about the use of the exclusivity. again, if you want those new breakthrough drugs, that's the only two levers we have. come up with money or longer patents. >> all right, let's open it up to questions from the audience. we have a couple of people with microphones here. right up here in front. >> there's a question right here. >> question right here in front. >> thank you. i think it's very important the effort to reduce costs on the prescription drugs but i want to mention there is another
important way that you should consid consider. one is hospitalization and health providers or e.r. and whoever sends somebody to the hospital to see the doctors when they are unnecessary to do so. not only they are forced to use those prescriptions or hospital faciliti facilities, also increasing the medical costs. if you can really take your effort to this. it's very important and everybody seems to ignore it. >> well, you know, you're right and of course if we repealed the affordable care act, that would only exacerbate that problem
quite a bit and throw us back to a situation where people felt -- people who didn't have insurance felt like they had to go to the hospital for treatment. but you're exactly right, when people who don't need that treatment come to the hospital, then that only increases costs. one thing that we've been seeing lately in the diabetes realm is people who can't afford to get their insulin because the prices in their formularies have gone up so much, they just are going over to the hospital. you know, they go into diabetic shock and go to the hospital to get their insulin. that seems like a very poor way to treat diabetes to me. >> in fact, it's a poor way to treat anything. i should not be in the emergency room with my sinus infection. that's why if you have a huge number of uninsured folks, that's where they're going to go because they don't have any other option except show up in an emergency room. >> one more question up here.
>> hi. i'm wondering notwithstanding your comments about the need for hearings and investigations before legislating, are there any solutions that you see congressional republicans being able to get behind and if congressional republicans can't get behind drug pricing is it up to the executive branch to be pursuing administrative fixes to the problem? >> i think there are going to be some congressional republicans here in a little while. i suggest you ask them that. i will say one thing that gene and i both fought for is the ability of the secretary of hhs to negotiate prescription drug prices under medicare part d. we fought hard for that when we passed that law in 2005, 2006. and i think that that would really help. number one, it would help bring
some transparency. and number two, it would send waves throughout the whole syst system if you let the secretary negotiate prescription drug prices. >> like diane said, you have to have two groups to sit down and work and we have a paradigm for it, whether it be 21st century cures or other things we worked across party lines. that's where we need to get started on health care in general but also just particular items like drug pricing. >> one last question from the audience. if not then i'll take one more shot. what about an agency like the v.a.? the v.a. buys so many prescription drugs, what role can they play in sort of forcing the industry's hand, and should they? >> the v.a. negotiates for pharmaceutica pharmaceuticals. that's the one federal agency that can do it, although i have a district in houston that has refineries and chemicals plants and believe me, the companies
negotiate for those certainly pharmaceuticals. so i think negotiation would be one of the things that, like diane said, but that's one way we can do it is do like the v.a. does. when the prescription drug plan passed in '03, that wasn't part of it. that was part of the problem. >> all right, great. congressman gene green, congresswoman diane degette, thank you for being here [ applause ] >> thank you so much. rita is staying back for our next conversation. i'd like to call scott gottlieb, the new commissioner of the food and drug administration. dr. gottlieb has indicated that the fda could play a role in tackling the price of prescription drugs by encouraging competition. we look forward to hearing from him. welcome, dr. gottlieb. reid, back over to you.
>> thank you so much for being here. >> thanks for having me. >> congrats on the new job. >> thank you. >> have you found all the light switches and all that? >> this is my third time at fda but my first time in the new facility. it's a lot different. >> i can imagine it's your first time in the big chair. >> that's true too. >> great. let's start with, what role do you see the fda playing in the pharmaceutical market? >> we have a market-based system for pricing drugs in the u.s. and we do that as a way to make sure we're giving proper awards to innovators and entrepreneurs but in order for a market-based system to work, in my view, we need to have true competition. i think that there are places in the pharmaceutical market right now where we're not seeing the competition that congress intended when it put in place the architecture for the modern system for drug pricing. that's what we're focused on at fda. there are places where we could
affect the amount of competition in the market with both generic drugs and also with respect to new drugs. we see places, particularly on the generic drug side, where i think that there are market failures because people are either taking advantage of certain regulations in ways it wasn't intended or our own regulations aren't working as we intended them to in order to create the kind of competition that congress intended when congress passed the original act. for example, there are places with respect to fda regulations where you see certain drugs have monopolies simply because they're large and we don't have a good framework for demonstrating sameness. those are complex drugs, in particular, drugs that are either complex in that they can't be measured in the blood easily or they act locally on tissue so the traditional ways for demonstrating sameness through the approval process don't apply, don't work well with those drugs. i think that's where we're focused, on places where we see
competition that should be happening in the market, not happening because there are failures in the system. >> how do you fix that sort of -- the factor of people taking advantage of the regulations as written? do you have to write a whole new set of regulations to plug those loopholes? >> i think that it's a little bit of -- i've said i don't want to be in the business of playing whack amole with companies, but when i look at the market and i look for the places where i think that there are rules that are being, for lack of a better word, gamed in certain ways, it's a dispirit set of factors and i think we need to address them one at a time. for example, we see situations where branded companies use the plans that we put in place to ensure the safety of drugs as ways to deny generic companies the ability to get access to the
samples and doses they need in order to create their generic companies to do the studies to apply to the fda for approval even though the company is willing to pay fair market value. branded companies are using tactics to prevent them from getting access. that's clearly not what congress intended. so i think that there are things we can do to address that. another thing that stalls generic entry, one of the things you want is there's a management plan in place around the use of certain drugs and a generic drug comes into that market you want the drug to have the same risk management architects and all the companies to be using the same system to decrease the burden of providers. that's what's provided for in the law but sometimes those negotiations over entering into the same system because the branded company owns the system they have to allow the generic
entry into that system or come to some compromise, sometimes the negotiations over that become protracted. that's another situation where that's being used potentially to stall generic entry and we're going to look at whether or not we can step in and make a decisions of whether or not to cut off those negotiations and allow the generic companies to go their own way. we want to look at policy changes to try to create more competition sooner. but there's a number of these areas where we see this happening. it's also happening on the commercial side. we talk about the rems being an impediment but probably the biggest impediment is that in contracts that the branded companies have with distributors, they have exclusionary language that prevent the intermediary companies to sell to generic companies. that makes it hard for the generic companies so sell. that doesn't seem to make sense. if a generic company wants to enter the market and is willing
to pay fair market value, they should be able to purchase it like anyone else. there shouldn't be previsions that prevent them from getting access. that's where i think we can do something on the fda side and work with our partners as well to try to address some of those other restrictions in the market. >> you've laid out the drug competition action plan. tell us about that. >> well, it's a multi-part plan. we've laid out certain elements of it so far to try to address exactly what i'm talking about here. we're looking at places where we see branded companies gaming our rules. we're looking at the issues around the complex drugs. we're also looking at issues related to the ordinary review process, these sort of every day generic drug review processes. if you look historically, generic drugs have gone through four cycles before they reach approval, an average of 48 months. we've committed to approve in 8 to 10 months depending on the
application. that's going to allow generic drugs to come to the market sooner and also end what i call a regulatory ash tragedy where speculators can come in and buy off a low volume generic drug that's not used a lot and maybe has one competitor in the market, jack up the price and know that it's going to take fda up to four years to get another generic competitor into the market. we need to make sure that people can't take advantage of the system and take advantage of that. we're publishing a list of all the situations where there's no competition to branded drugs. we're going to prioritize situations where there's a lack of competitors so people will know markets where there's a lack of competitors and we're going to commit to reviewing generic drugs more quickly and get those review times down so people know that if they come into a market and buy off a low volume generic drug and try to
raise the price out of proportion of what seems to be tethered to any reasonable notion of value, that price is going to attract competitors into the market quickly and those competitors will come to market quickly, not four years but hopefully 6 months or 8 months so you're not going to have that long opportunity for an ar ba tragedy. you see less and less of that activity now but you see some of it and obviously there's been commentators who have felt that it's abusive. i think it is an important principle at stake here that the high price is attracting competitors, so that's good. that's the market functioning but that competition should come onto the market much sooner. >> talk a little bit about the office of generic drugs. you revised some of author procedures. how do you want to see them operating in the future? >> they've been operating very well thanks to the user fee. now in the second generation of user fee related to generic drugs. it's hopefully going to pass some time very soon. that office is much better resourced than historically.
i remember a time when i was fda that office was his toiricily funded through budget authority. whatever there were cuts across the agency, the parts of the agency that were protected by user fees wouldn't get caught in the parts of the agency that budget authority would. generic drugs had either not even -- seen increases or cuts. i think it's in much better shape now. it's in excellent management. we announced this week some changes in the procedures for how they are going to review applications. we put in place -- putting in place a map which is basically guidance to our viewers about streamlining the review process, creating a template to make it more sort of consistent in how drugs get reviewed and also putting out guidance to manufacturers, trying to help generic drug companies learn about what some of the common problems are that we see in applications. the problem on the generic drug
side and on the new drug side as well for a while is that the applications go through a lot of cycles. when they come in, they don't come in in a form where they can be approved on the first cycle. this was something we saw on a f cycles. this was something we saw on the new drug side. and we made an effort to try multiple cycle reviews, and we were able to do that. we're going to be focusing a lot of our activity on the review function, trying to cut down multiple cycle reviews. that's the goal. >> what kind of backlog on generics does fda still face? >> i don't know the exact number on the backlog because we've been working it off. we've committed we're going to work the applications off. so we're working through the
backlog i think we'll hit that goal. i'm very confident we'll hit that goal. the hope is we can get to a steady state. the reality is the number of applications we're receiving and improving is increasing. we've had a record number of approvals last month on the generic drug side. and we hope that continues. but we're so confident we'll get to a steady state where we aren't still building up a bag log. i think we're close to that right now. >> and where do you see a pallance between cutting regulations and protecting the public? >> i don't think it's a choice between more regulation or more safety. i think that -- you know we could have a situation where we have a smart regulation and efficient regulation that alos us to get more drugs on the market and efficiently and making sure we improve patient safety and improving the risks and benefits associated with drugs. and that's another part of what
we're doing. we've had an invasion plan that we've been reviewing is to try to look at places across the agency but especially on a new drug side, we can have them place better framework for looking at risk benefit, safety and efficacy, better framework of particular new areas of technology and make sure we have in place the right policies to be approving drugs more efficiently against more modern scientific standards. for example, one of the values we've committed to is looking at -- so there's certain drugs that target certain systems of disease. it's driven by the same molecular signature. so if a drug targets the underlying molecular driver of the cancer, do you have to prove efficacy in a tumor teep. or can you just prove it workess
against tumors with this particular molecular driver? and we're going to allow approvals based on molecular driver rather than each study, each organ. which obviously is going to make the development process more efficient. we have a few patients with the liver tumors, patient piegss with tumors in lung and get it approved rather quickly. that's an example where i think we're look at sort of modern science and the way drugs are being developed today and looking at how we can adapt to modern standards in a more efficient way. and remember that new drugs ultimately -- and this is something i learned in my private life as a venture
capitalist -- i was never in a position to price drugs so i don't know all that go into that, but certainly the costs of capital bear some relationship to the product price you're trying to develop. and we can ultimately impact how drugs need to be priced or eventual are are priced in the market. and the cost of capital isn't just the director cost of developing a product. we know it's also the time cost of the capital. in fact the biggest driver if you look at models of how these decisions get made, the biggest driver is often time and uncertainty, not the direct cause. because direct cause if they're understood, they can be financed. uncertainty and risk can be financed. so that's what entrepreneurs tend to underestimate. the fda has targeted this little niche market of older drugs with high costs.
why are those a priority? >> well, older drugs with high costs -- so these are complex drugs you're talking about? this another priority because this is whole class of drugs only because of the complexity of trying to demonstrate saying this for those drugs. so these complex drugs and these are things like meet fr dose inhalers or things inhaled or an oral drug you swallow but acts locally on the gut or drugs harder to measure on the gut so you can't do a measure of the availability of the drug in the blood. these drugs are basically drugs being sold as branded drugs at branded drug prices. to me, that's a failure of regulation. we have to come up with the regulatory standards that allow those drugs to go through the
generic process. different kinds of formilations that allow drugs to have certain attributes that benefit patients. it works by basically you have the old pills so it was crafted 30 something years ago where most drugs were pills, not chemicals whch thayou swallowed their pill it gets into the blood the same amount of time and stays and it'll have the same effect. and they got to target organ and they worked. but when a drug is acting locally on tights, a topical drug or an eye drop an inhaled drug or it it can't be easily measured in the blood because it's in some complex mixture,
the old process doesn't work so well. so the question is do we need a new statutory language to create a new pathway for these drugs, perhaps. but i think there's a new thing the fda can do. so hopefully we'll eliminate this problem going forward by putting out the standards how complex drugs can prove sameness in these settings. this isn't a trivial amount of spending. it's billions of dollars a year in drug spending that should be subject to competition but isn't because of our rules or lack of rules. again, as policymaker that's where i want to focus. for one reason or another usually because of policy
failure, because of market d distions, we're not seeing it. >> is it the fda's role or should it be the fda's role to increase transparency in the pharmaceutical market? >> well, that's sort of a broad question. i think we are committing transparency in the pharmaceutical market. we will often send a letter to the branded company saying there's no reason why you can't sell it to them. with the rems -- we say with the rems you have in place we've reviewed the generic companies biequivalence study plan and they're going to maintain custody of the drug in an appropriate fashion and you can sell it to them.
so those letters go to it branded company. we're look if we can make them public, and i think we can. so that will provide public transparency around situations where we believe -- because we're sending a letter there might be an impediment to the generic company get access to the doses they need to do biquivalency studies. i think that transparency could be useful in the market to effect some of this behavior. >> all right. let's open up to questions. microphone coming right to you. >> hi, i work for prime therapeutics, which is pbm. and where there's competition, we can drive down costs. and there's been a lot of great prioritization of break-through therapies. i think one of the challenges that we in the market generally has is sometimes there's less of
a priority for what in the old days were called b2 drugs. you get that competition on the branded side and have several drulgs competing on the opposite class. is there any way of looking at that and getting it for a particular action or condition? >> there'll be multiple drugs that will be prioritized. and this is something congress can look at as well, trying to extend break-through designation to other drugs in a category. but as far as sort of what we refer to me too drugs, i think it's not necessarily a situation where fda isn't prioritizing applications. we're referring to rigorous time
line deadlines right now. and i personally dent see a priority of applications -- i think the challenge that i see is more of a commercial challenge, which is companies are more reluctant to be the second, third, or fourth drug in a category. and i think that's more commercially driven than a regulatory issue. and there's down sides to that. and to your point, you see less competition within some of these categories. and also it's important to have therapeutic variety. so even though a drug is targeted to the same condition, sometimes patients do have a deferential response. we know that. >> all the, any other questions? got one right up here. sorry, microphones getting there. don't worry. here we go.
>> hi, so i was wondering if you could walk through why fda hasn't publicized those rems letters previously, what issues there are there? i know previously fda hasn't been able to share kmachl when a brand company can't reach a shared rems. i'm wondering if there's particular legal issues you all participate possibly running into when you try to share these letters. or if they are even public if the basic information, would that sort of information be made public? >> remember with these letters in particular i'm talking about, these letters are being sent to the brand company. so we're making the brand company aware of the fact but we're not making the public aware. so if there's conference information there, it's already been shared with the third
party. we're looking at the issue of whether or not there's confidential confirmation in any of these letters and how we would redact that. i think there's more we can make public. a lot of these come down to question on how much resource you would spend redacting certain ccr comp and how much risk you have to take. we can't be doing these things just because -- we certainly don't do these things a papublic shaming vehicle. i think we do them when we have a public health rationale. and if we a strong public health rationale of taking on the burden, i think we have to look long and hard at doing that. >> one more question. anybody in theba back? all right, we got one right back
here. >> hi, i'm from angen. and i was thinking if larger pharmaceutical companies are spending hundreds and thousands of dollars to put new drug into the market and then generic drugs come in more quickly, are these companies going to see a return on investment and is this going to impede new drug innovation in the future? >> well, i'm not looking to appropriate intellectual property. companies come to the market with an expectation of what their intellectual property is. they make expectations to develop a new product based on how much composition they have to protect products. they make economic decisions whether or not they're going to allocate the capital to make the investments subject to what they
have. the competition congress fully intended under their debate when it expires, comes to market and people aren't using our own rules in particular to extend the market past the point it's intended. and that's what happened in some cases. people are taking advantage of the rules we created for another purpose in a way to extend other practice. and it's having an unfortunate effect of -- it's not intending to do this but having an unfortunate effect. if in fact, we're at a situation with the cost of drug development, and your point is well-taken, the enormous capital investment is too much as expected to the ability to recoup those investments given what the patent life is, the average patent life is. that's something for congress to
comp template, not something for us to contemplate. we have to do our job. and oo our job to make sure these drugs are subject to generic competition and once we can legally approve a generic product. >> all right. thank you so much for being here. we really appreciate it. >> thanks for having me. >> senator bill casied is a member of the senate health, labor -- welcome senator cassidy and over to you, reed. >> thank you for being here, senator. we really appreciate it. the last 48, 72 hours has been pretty intense up on capitol hill. let's start with this. what are the next steps for
addressing the aca? >> i didn't mean that as a discouragement because actually i came away very encouraged last night. last night the president said replace over repeal. he said that over and over again. he wants something done. and it's clear they're willing to do more to achieve something. that said, now what we proposed is that you giv the talking point, if you will, the power back to the patient, power back to it state. she who controls the money typically has the power. so if you return it to the state and the patient, the dollars then she has the power, the patient has the power. so how can she back rent? can we take all these federal dollars and dispense it back to the state with guidelines with some provisions such as for
example, you can use health savings accounts to pay for premiums which allows state a funding account for someone to purchase a premium of their choice. increasing tauchl titian along insurance companies and getting federal government out of micromanaging federal insurance. we think that's a good approach, and we're getting some traction on that. >> what role does congress have to pay in increasing transparency over drug prices? >> so you're making a great case that transparency and the lack of transparency and contributing to the rise. and i think that's fair. for example, point of sale rebates, the pbm negotiates a short discount, the insurance company gets it. but when a patient is in herductible, she does not get the discount. so she's paying three times more for a drug than is the
contractual price. it may be that congress has to mandate that those patients get point of sale rebates. that has lots of implications. but agreed to what she's paying out-of-pocket more rapidly pushes her to medicare part d. so not only is she paying but the taxpayer is paying. so it goes up dramatically -- there's a report that lays it out. secondly, i think my state's one of the few to do this, there is at least one pbm, which puts a gag order on the pharmacist. in some cases it's cheaper for the patient to pay out-of-pocket than it is for her to go low her benefit. she pays more under her benefit. but the pharmacist is gagged.
and if he tells the patient, listen, if you pay cash you get a better price, he loses the contract of the pbm. now, not all do that but one does that. and our state, louisiana, there's a law passed in which you cannot have a contract -- again, transparency of information benefits the patient. we're all about transparency. so how does transparency about lowering drug prices impacts funding by medical research. >> i don't know if that impacts funding of medical research. i'm not sure it's going to have a whole lot of traction. again, dr. gotlieb spoke earlier.
i'm afraid if we start consfisicating people's intellectual property, it'll chill that investment and those needed cures that multiimately will decrease cost in our society and outcomes for patients may again be chilled. >> as congress starts to address the aca once again and at least senator mcconnell has suggested there could be some bipartisan discussions going on, are drug prices part of that discussion? is that part of the aca that's going to be fixed? >> i think that's something that needs to be separate. we're not touching that with the obamacare repeal replace. number two, we have a hearing on drug pricing. and what broke out was a lot of frustration on the democratic side about the process related to the appeal of the aca.
and ended up having a great panel but a missed opportunity to explore what could be done. so i think until we get this repeal, replace behind us, it'll be difficult to have a formal -- there's a lot of things we agree on. can be work torgt on those points of agreement, setting aside those which we disagree to come to some common ground? >> the white house is working on executive order that would address drug prices. what do you want to see out-of-the president? >> obviously, dr. gotlieb is going to employ some of that. but there's an expectation which delays the approval of certain drugs merchandise so we want to dress that.
the supreme court i think just this past week made a ruling that would bring generic biologs at least six months earlier. that's a good thing. so there's no one silver bullet for drug pricing or for price transparency. but there's a lot of things you can do on the margin which collectively make a difference. where s's the balance, though, between cutting regulations and cutting the time regulation is approved and protecting the public? >> so when you approach drug pricing, you have to kind of setup a metric. and this is what we do in my office is we analyze this. we look at as generic, excuse me -- small molecule especiallity drug versus brand name and generic. and really what you do is different in each segment of
this. and we're using specialty drug. if you look at that, then you can break it down. let's take a generic, which has no competitors in the united states and because of the absence of competition, they've jacked up the price. an antibiotic is 50 years old, they buy it over seas, and they used to pay 50 cents ask now they pay $13. someone may dispute that, but that is at it's relating to me. but in this case we should globalize the market. there's a plant in india producing the active pharmaceutical ingredient for the drug that's sold in the united states as well as the drug that's sold in the united kingdom. and i can tell you we already have a memorandum of
understanding between the fda and eu equivalent that says if one certifies a plant, then the other will accept that certification. should we say -- and i think we should -- that for this generic small molecule that there's an adequate supply chain for integrity for a drug going to the eu and the united states, that we would allow sale of a drug from here to there. you could imagine wal-mart going to france, buying a lot of a certain drug which only had one supplier here, bringing it back and selling it. we've used market forces to create competition as opposed to the heavy hand of government regulation. i think that's a way to go. that is an example. and again, you have to have this approach. and i'll say it once more, small name, specialty, brand, and
generic. >> we have dr. gotlieb here. what have you seen? >> there's a lot he can do either by transparency of intept and/or by trimming processes to improve through put. there's been rules that have been held up -- granted i'm sure they're complicated rules to get right. but if implemented would dramatically shorten introduction of generic competitors. that's a good thing. once you get a jaw narric competitor, prices begin to plummet. so i think gotlieb will bring a lot of energy and insight into the this job. >> right. i've got a couple more and then we'll turn it over to questions from the audience. but what role i asked congressman green this, an agency like the va which so many
pharmaceuticals negotiate certain price, what role do they have in bringing prices down in the market? >> well, it certainly shows its possible. i always said it would be quite trumpian if president trump looked and said va, medicaid, tri-care, you name it, we buy 80% of this particular drug, maybe we should negotiate. and using that monoxomy position to negotiate whichever priced he wished. i'll tell you that would save billions in the short run but it would quell investment in the long run. and president trump is a business guy, so he's going to pick up on that. on the other hand, could you imagine him doing that? absolutely. so the va shows you what's possible in that position and it may encourage our president to
go in a direction of strengthenening that position even more. >> all right, any questions -- >> let me just say one thing. >> of course. >> let me just say the high price of drug -- let me go back to the patient. it should be about the patient. pharmaceutical companies do the research that keep us all healthier. in this room there are people alive because of advances in pharmaceuticals over the last 30 years. i always use the example of peptic ulcer disease. and then along came -- and we never do that surgery anymore. similar there's someone in this room with crones disease and
people with crones disease now are on infusion and they never need that surgery. there are some people who deny lifesaving drugs because of the price of drugs. the medicaid programs cannot afford the medicine to treat patients as rapidly as they would wish in order to save people's lives. that is just a reality. and we have the also recognize that prices of drugs effectively deny treatment to someone who need it, the va success of driving down price is good for patients, and that's something we have to think seriously about. >> all right, any questions from our audience? i see one over here.
there we go. >> hi, carl and i guess i have to take a little issue, senator, unfortunately with what you just said about the hepatitis c curative drugs. and you mentioned the fda is a great example. and i think they're down to around $25,000 for a cure. but for medicaid it's around the same price because of the rebates, competition, and discounts. and so we feel that, you know, this is 24, $20,000 for a cure and that will save money down the road. and there's a lot of drugs that are more expensive. so we feel the medicaid program should be able and -- >> if you feel that's normal, that's not the reality. and i don't mean to be rude. but if you look across the nation, if you say most of the
cost by the federal government, technically yes. but if you look at the burden of those with help c because it's disproportionalt to those on medicaid, it is quite a figure. most state governments cannot suddenly put up that amount of money. we worked on a spreadsheet reported in the "the washington post" and we put up what's is our disease prevalence in louisiana, what would be the cost of therapy. if we treated everybody we possibly could in the first four years, we would actually save money in the long-term because you would have fewer trance plant, hepatitis c, et cetera. but you've got to treat them up front. two things i looked at one i called the mortgage way of financing and the other the flet fliks subscription way of financing. in the mortgage you're saying
we're going to treat everybody we can up front for the next four years and pay off everyone over 30. because we realize the medicaid savings program over 30. and this way we can budget for those savings, so the savings would pay for it. that would be the mortgage. the netflix subscription is that you'd pay a certain amount to whoever, and then you treat as many people as you possibly can. and so the company would be guaranteed some reasonably -- okay this is how much we expect to get from you over the normal course of events. so you can treat as many as you wish. so maybe we don't need to lower the cost but do need to come up with alternative ways of financing. because i can tell you the price tag of some medicines is absolutely limitic to therapy. it totally is. i don't say it to be rude
because you are well-meaning. but so am i and that is the reality of the situation. >> all right. we've run out of time. thank you, senator cassidy. >> thank you. appreciate it. >> next up we're going to be rethinking pricing. how are stakeholders in the health care industry finding ways to address the rising costs of medicines, what kind of collaboration taking place and what can patients expect? taking the stage the senior vice president of health policy at the arista economy, the senior vice president and chief medical officer, and the chairman and founder of -- cancer research. the hills policy editor kim
dixon will be leading this conversation. >> hi, thanks very much for coming. so we've had a few discussions that touched on some of the challenges that we face with skirocketing drug costs. i know dr. gotlieb talked about things going on the regulatory side. but i think there might be the different opinions on what congress can do. so he talked about competition, speeding up drug approvals, getting rid of some of the regulatory hurdles. what more can be done -- i think c.c. had some opinions. well, more observations, kim. >> i have to remark i've been in d.c. for many, many years.
and i think that commissioner g g gotlieb is off to significant start. he mentioned this morning what may seem like a small thing to lay people, which getting samples to generic companies. but it's very significant. and it's been a huge roadblock. so if he can have success in areas like that, we believe it really will spur some competition and start to bring down prices. i'll just toss out on the table one baby step for congress, which would be a bipartisan bill right now for senators baldwin and mccain on transparency. and transparency is not going to solve our drug pricing problem by any means whatsoever. but getting information to the public would sure be a nice start. >> right.
r&d costs are controversial. why don't you talk about what you think about that bill and the idea of more transparency in r&d? >> sure. what i'd like to do first is take an opportunity to put cost in context and a few figures relative in 2016 retail and physician administered pharmacy spending was roughly 14%. that figure is expected to continue roughly the same percentage through the next decade. medicine spending growth, roughly 3% to 5% in 2016. brand net prices, 3.5%. lilies increase in 2016 was 3.20%. and just to put those in context just as it relates to the over all spend i think is important. and what has occurred over the
last number of years in health savings accounts, hra's and individuals are facing more pressure in terms of deductibles, copays and out-of-pocket spending is increased a significant percentage since 2013. and as congress wrestles with headache, the affordable care act and drug pricing, drug spending i think one of the areas they can focus on is the out-of-pocket expense. and senator cassidy spoke to that to some extent on transparency lily issued a report earlier this year showing over a five-year period the list in net price and our agigate net discount, which has almost increased to 55%. as i've looked at transparency legislation primarily in the
states where a number of pieces of legislation last year in this have been introduced and moved through the legislative process, while they're well-intentioned the challenge is they don't do anything to address patients out-of-pocket expense today. in some instances there are anti-competitive provisions that would create some closure and don't really speak to had value of medicines. that would be my take on some of the legislation. but we want to work together in terms of that goal of transparency, absolutely. >> did you want to jump in, allen? >> yeah, but first a personal thank you for inviting me to do this. but this is a vexing problem because weave we have the best of all worlds today. on the other hand, if these drugs -- if the system can't sustain it and patients can't
afford it, it will have no benefits to the patient. we are challenged by keeping up this pipeline and competition and lifesaving drugs. but we are also challenged by the costs. pie opinion is speeding up generics and transparency and all these things being recommended, which are important, will not fix a systemic problem. >> so transparency, speeding up generics not enough? i mean what would this bipartisan solution -- >> you'll have to look at the whole health care eke slgs. you have to look at where patients are getting treated. you have, for example, in my world where we have innovator drugs that are personalized, you have to make sure the diagnostics are working, patients being treated. there are many studies that show that many patients are being
treated and not given the right drug. so it's a systemic issue and a complex issue because we want to keep innovation. but if patients don't have access or can't afford the drugs, it will not benefit the patient. >> there's this different from the pharmaceutical industry that drug prices are really not rising. and maybe they aren't as a whole in the eke system, but we do know there are specialty drugs, awesome drugs that are saving people's live, those are rising at least within certain classes. and those are the headline numbers we see. so i don't know -- i mean, bill, if you addressed specifically r&d cost and, you know, would the industry be willing to give more information on how much it cost to develop a drug? >> again, speaking to some of the transparency legislation
when you look at what is introduced and how it progresses through the legislative process, the challenge of looking at it from a by-product process elevates some of that concern. >> if i could add to that, let me thank everybody for joining the hill in this panel. i didn't switch jobs. we switched names. so just to provide a little bit of context there. and one of the reasons we did that was in addition to representing the interest of generic -- it will shock you to hear me associate myself with all of those remarks, we also represent biosimilars that have the potential to reap enormous
benefit. the only thing i wanted to up frn say was not all drug prices are going up. generic prices are actually going down. there is price deflation in the over all generic marketplace. now, the media and others will often highlight a single incident of a case that is alleged to have skirocketing prices or price gouging in two cases that happened inlast two summers each, neither one of those products have been traditionally categorized as a generic. i just got the word no out before this reporter took me to test and said how can you defend them. there's a lot of confusion in
the marketplace, and i think one of the things we have to do and cici touched on it. there's a lot of people talking about slugzs to prescription drug cost. there are lot of agencies that are actually taking meaningful action to doing among other things, enhancing competition. he is sort of the exception to the rule. he has the potential to be transformative. while it's good for the marketplace, it's good for patients. i think no matter who you think is responsible for why we are where we are in the drug pricing debate right now, there's a lot of finger pointing going on. you know, the reality is what
more and more people are coalescing around key component is by market competition and nowhere is that more prevalent than increasing competition for generics. >> competition is a good thing. and i think the challenge when you look big numbers in large groups of people is the individual who takes his specific drug. that drug could be very expensive, which was pointed out on the panel. and some of these drugs are very difficult for people to afford. so where i think we all come in and work together specifically in the pbm industry is to provide the mechanisms to work with our partners and pharmaceutical companies to evaluate if the drugs actually provide value, which is
important more so today and to use our systems to drive to leer cost alternatives when those are appropriate and certainly to generic products when they're the most cost-effective. i really do think in a complicated system it requires fr on the pharmaceutical companies, certainly the pharmacy benefit managers that have systems that allow competition dr. gotlieb talks about. >> and i'd like to complement that the solutions lie in collaborations, how we can work together in partnership to pursue experimental solutions or value based agreements or contractual relationships and
speeding generics to market with partnership with the fda. i think we're in agreement in terms of that. >>, you know, i think the competition is incredibly important. and even in the innovative drugs if you look at what's going on right now in immuno-therapy, i think we have at least five, drugs all going to be used in combination. they all have to be specific to a biomarker. and patient population that receives these drugs has to get the right one for them. so it's evolving. on the other hand, as i said earlier, if the copays are high, if they don't have the right diagnostic, the right health care, it won't benefit the beige. and if they can't afford it, it's of no value. so we have to preserve invasion, presever patient choice, patient outcomes and figure out how to
pay for it, and this is hard. >> it's kind of mother hood and apple pie right now. we all want value, deliver value, hide value where and it's great. i'm a valuable person. you're all valuable people. but let's get real here, right? insulin, valuable. incredibly valuable, right? by 2015 1 in 3 americans will have diabetes. just think about the implications of that for our society. now, our incredible team at achp went and pulled the pricing trend of the top seven insulin products. what happened with them between 2010 and 2015? across the board the increases in those products ranged from
93% to 325%. and insulin has not changed. not one bit. so what's going on there, and how are all of these people with diabetes going to afford this? how is our society going to afford this? >> i agree with that point so much. and i think that, you know, we have a tendency to talk about components in isolation. so when you look at the dynamic that you just pointed out, you would expect the portion that a patient pays to increase as well with the total price that society pays for a product. so i think that it's very hard to point to, you know, a specific piece. certainly with the members paying as a part of it. but it's hard to say that the total price of the product, as you pointed out, is not an issue
either. >> general, when we had our call from the employer interview, you said there's been a change in the last few years -- i mean how do you keep that momentum going, and what specifically -- it sounds like you're all agreeing, sort of. what specifically do you see happening or could happen next year given the political environment on the hill? >> well, nothing's going to happen. >> that is cold. >> don't sugar coat it. >> i will start by saying employers pay about 80% of the health care of the people we ensure. not just the people who work for us, but sometimes their families. so wee bearing the brunt of these cost increases. i don't think you'd find a single employer who'd want to see a layoff notice go to the good men and women of the fda.
we must fund the fda. at the same time when guess says, well, in the next five years there will be one bill and one bill only that talks about drugs that's a pass piece legislation, let's do that and talk about drug prices later, that is washington talk and not real talk. real talk is we're going to miss the one opportunity we have to do a must mean -- and we have to do hearings. and i love hearings. people ask questions and there's awesome witnesses and interesting conversation. and usually it ends up producing nothing. so right now we're going to have to focus on what can we do through the administration, working on what can we do through our pbm patterns, getting drug companies to finally have some skin in the game, and at the same time
government is even in the way of that. we have pbms and drug companies trying to do the same thing. and it's creating problemseraltied to stark law and kick backs, things where the government looked at a few years ago and said this is complicated, let's find less to do. but we're worried. our costs are going up at an unsustainable rate. and when i hear things well it's not the cost of the matters, it's the co'-pay, no it's the cost of the drug that matters. every time we have a conversation about drug costs, everyone does one of these. say say oh, it's the supply chain, the middlealman. and others say it's the cost to the companies that they're straight up buying them. >> last people want to jump in.
we can go down the line, i guess. >> just go to the podium. >> i'll be quick. i'd like to agree strongly in part and disagree respectfully in part with these comments. i agree with you on the lost opportunity for user fee negotiations. i think unfortunately washington is what it is as we all cloe know. and don't underestimate some of the forces that don't want to attach that discussion to it. at the same time, there will be vehicles later through the area and tax extenders. so there will be vehicles for which the federal government will need to find money. a lot of people on both sides of the aisle campaigned on this issue including the president of the united states. and if we come through a cycle, and we all know 2017 a better year for enacting legislation that 2018 will be, if nothing
meaningful is done in this space, then i think the folks who ran on it, right, in a media savvy world are going to be reminded about that fact nonstop through the 2018 mid-term cycle. so i think one of the things we have to focus on is where can we actually seize the opportunity for alignment. if this was a simple solution, we would have found out, we might not be here talking today. there are things, additional things that congress can do short of completely disrupting the market and making the industry over all a regerating utility, to increase competition. and there are plenty of incentives that would allow for that type of competition to
be -- the reality is, and i'll just speak for the generics on the last point, generic utilization is up. generic revenue is down 15%. and the reason for that in many ways is the uber level in the marketplace. one of the challenges is there's been an incredible amount of consolidation in the whole chain. to expect 10, 12, 15 generic company tuesday be competing on price when there are so few perchers in that market is just something we have toel% factor . you get there now in three to
four generics in the marketplace. so when it works and funks, it's driving an astronomic amount of functions, so we have a lot to fix. we also need to make sure we don't disrupt the mechanics that are actually driving that level of savings. >> so when we talk about drugs, we're not talking about a car. to take a car from here to k street, you can take an ush, walk and you're going to get there. when you're talk about medicines drugs targeted to a specific population, that's more complicated. because the patient if they get the wrong drug and it's cheaper, it isn't going to help them. they have to get the treatment that is with the validated diagnostic.
we're doing master protocols in rare populations we're doing the long map master protocol. some of our tumors are 2%, 5% of the pop laegz. if you find these patients screened inefficiently, 80 wers, 90% won't get the wrong drug. we're now going to deal with combinations. this is going to get proprietary complex. how we balance these issues are going to be very challenging. eventually we're going to have a lot smaller population. quality of life is really important. >> i'd like -- go ahead.
>> i'll speak next. i agree with my colleagues on the panel. the perspective i want to make sure the audience leaves with is the pharmacy benefit manager's role is to take competition, take choosing the right drug in an imperfection situation and implement that for patients, that that's kind of how we fit in. and it's a difficult thing. and perfect information is a part of why it's so hard to get there. but without the industry in the middle -- i'll give you a simple example. we're in an opioid epidemic. and the cdc has come out with guidelines that say doctors should prescribe less than seven days of morphine in acute
medication. they also said you should have less than 50 morphine equivalent dose average per day, nothing more than that. and they understand that if you take an opioid with a benzdias peen, your risk of over dose, which is actually more lethal now to americans those things should not be done together. so what we do is we implement programs that allow the script only to have seven dates worth of supply. it allows us to flag the doctor and patient of the risk of a
bens benzdiaspine. that's how we fit into the equation. >> back to the previous comment about employers, sometimes you forget that lilies not only a pharmaceutical manufacturer but we're an employer as well. with tens of thousands employees, depends and retirees who are on a health plan in hsa and hra. and there are steps lily has taken in terms of the employer contribution and the plan to manage their health care expenses, looking at exempting preventative and chronic from the help phase. and i think those are important that help vilks of what is their consumer choice in selecting a health plan and how they
progress through the year. >> is that enough? >> one last thing. unfortunately, there are a lot of companies that would for asthmatics but, under the current rules, if we do that, the patient loses their eligibility to contribute to their health savings account. one of the things that i think the administration is working on is changing those rules at the irs. that would be a game-changer. it would make a lot of people's lives better. >> agreed. >> seems like that's something that hasn't gotten a lot of attention. >> it's not sexy, i guess. we think it's important. >> ceci. >> absolutely agree. it is very important. i think it picks up on a theme that alan and others have tried to hit today, which is about getting the right care for the right patient, right time, right price. so, definitely a part of that is thinking smart about your health. so prevention and managing chronic diseases and having that
first dollar coverage on some of the things like diabetes. high blood pressure, cholesterol, et cetera, will enable that's individuals to live much healthier lives and not have the much more serious illnesses later on that frankly cost all of us much more money. so some of this is just simply being a little smarter about the investments up front that make sense, and it actually takes thinking a little more long-term, which is especially difficult in washington and with score keeping and all of that sort of thing. but spending that money now will save later on, and i would really like to see policymakers with the industry start to be able to track that and illustrate that in a much more meaningful way. >> can you all get meetings on capitol hill to talk about drug prices with all the oxygen being sucked up by the aca, andúb hoo you see -- obviously it's in a state of flux right now, but how
are you gaming out, you know, how your industry will be impacted? it doesn't apply to everyone on the panel. i know the aca was a coverage bill by obviously impacts pharmaceuticals. it doesn't get a lot of attention. so have you taken a position, for example, chip, on the latest repeal bill? >> if you were going to say on the repeal bill, i was going to say which one. it's a moving target. in the time we have been in here, who knows what's happened. it's a bit of a moving dynamic. our position has been and continues to be we want to make sure that people have appropriate access and coverage for health care, including comprehensive prescription drug coverage. in many ways for some of the reasons you talked about, because having access to both innovative, generic and biosimilar moving forward is in the continuum of health care one of the most cost effective vehicles you can have to maintaining is it advancing public health.
on the specific issue that you asked, can you get meetings in this overall dynamic that's going on, the answer is yes. i think the reason for is that prescription drug cost was such a big discussion, as i said earlier, through the campaign cycle, that whatever happens or doesn't happen in that space relative to whatever does or doesn't repeal and replace, the issue will come back around on its own. there was a meeting the other night when president trump brought a number of senate republicans together for dinner. the primary object was to try to convince them to vote and support the repeal effort. in addition to that discussion he raised two issues. one of which is about selling insurance across state lines and the other is what to do about drug prices. i have every expectation that the issue will circle back around. if it doesn't happen within the user fees, it's still open in the senate. i would second all the comments that it has to get passed and has to get passed before they
start sending notices out to fda employees. they don't deserve that. >> i know it's a moving target and the goal is great and affordable coverage. if 32 million people -- if you believe the cbo and 32 million people don't have coverage anymore, that doesn't seem like something that would be a good thing, or -- is that that simple? >> i think what it will do and then i'll stop and let other panelists opine. i think what it will do is take the sensitivity on the issue of prescription drugs and elevate it even higher. >> i would say, with respect to coverage, the reason why that is so important and why so much of the recent debate keeps coming back to that is, just try to think back to 2008, 2009 when we had a very high number of uninsured americans. you can all recall very well what occurred. first of all, individuals who had preexisting conditions either could not get insurance or faced very high insurance
bills, or they went to the emergency room when they were terribly sick, far, far late in the progression of their disease, not good for their health, not good for anybody's wallet because those costs get passed on to employers and taxpayers and all of the rest of us. so the reason why people keep coming back to that is, it is a linchpin piece of our system. you hear the boring talk about managing a risk pool. you have to get everybody in a risk pool to manage it around. is the 32 million the right number? who knows. as senator lindsey graham pointed out, even if cbo is off by half, you know, okay, so 15 million, 16 million more uninsured. that's okay? who wants to say how many million more uninsured is okay. >> if people want to stress cost and affordability try to see what 20 or 30 million people
losing insurance will cost the system. they're all going to get it at the where it's too late to save them. emergency rooms, and the stress on the system will be much worse. we have to fix this. this is a complicated problem. but taking 20 to 30 million people without insurance, they have to have good insurance. and we have to think about the patient, the individual. these are people that are sick that need help, so we can't forget about what the impact will be on families and how treacherous this is going to be and devastating to people. >> so one of the -- >> particularly the underserved and the people who are themselves challenged today. >> one of the things i have to do for my job that's not fun is i have to read the whole cbo reports. i haven't had a chance to read the one for the repeal only bill but i delved through the ones for bicra and the american health care act. those started with the number $23 million. you see that 11 million are
people who are no longer forced to buy something that they don't want. about half of the remaining, so another 5 million or so, are people who live in states that have not expanded medicaid thus far but cbo thinks more states will expand. they don't say what states those are or when they'll expand them but that it's certainly going to happen. so there is an additional 5. three to four million are people who currently have coverage through an employer. cbo says their employer won't offer coverage anymore. in the next paragraph cbo said, actually, probably not, it would have to be an employer that has highly paid individuals who are healthy but our model says it so we're keeping it anyway. if you delve into the numbers, it's closer to 4 or 5 million people who would have medicaid expansion today and wouldn't in the future. i think that's a number we should be concerned with, and i think those people will need help and something would have to be done to help the people make sure that they get coverage, but i think when we talk about numbers in the 20 and 30 million
we're not telling the truth, we're doing washington talk again. >> certainly the affordable care act and the prescription drug user fee act consume a lot of the attention in the time whether it be in hill visits or other dialogue. there are policy solutions that we're looking to pursue, one being valuable-based agreements and recognizing it's not the silver bullet but in the set of tools to look at, this shift from volume-based to value based care and the potential to connect reimbursement to real-world outcomes. but there are also barriers, regulatory or legislative on the anti-kickback statute. best price or amendments to best price or asp reporting. and the ability for pharmaceutical manufacturers to have conversations with payers prior to fda approval and a clarification of that, are instances where we have discussions, again, with
stakeholders and member of congress about the potential to have value based agreements flourish and be one of the solutions. >> we'll take a few questions if there are those out there. in the first row. with the black dress. >> thank you. cat davis. from the familial hypercholesterolemia foundation. thank you so much. this has been fantastic. part of the title of today is ensuring access. it's been very future-focused. i want to ask, we have systems in place right now to manage costs, and including what we heard from in the beginning, the role of pbms and payers. what we see in our population, i know it's true in other disease populations as well, is that even when everything is in
place, somebody has insurance, the drug is on their formulary, and there are innovative treatments for people who are otherwise out of options. out of -- generics have not done it for them, what our research shows, we published recently, is that 63% of people who meet criteria are denied access, are denied their insurance request. we know that's a burdens on health care providers and it's a burden on patients. if innovative therapies are not getting to the right patient at the right time. what can we do to fix what we already have in place, and how can we work together to make sure that those patients who are, for example -- in our example, have a genetic condition and a treatment that's great for them and still they are denied. thank you. >> i can start. with an answer. so, i think, first, when a
patient that requires a drug and it's appropriate and they don't get it, it's a failure of the system. so i fully agree that that should not happen. so where do i think the solutions are. i think the solutions come from better and more perfect information at the level of the provider. so, i can tell you some of the things that we are working on. we are working on electronic communication within the doctor's work flow so that there can be realtime or more immediate answers and a dialogue around that that is more seamless for the patient. i can't speak to the numbers that you were referring to but i can say that ideally it should be 0% for people who need it. and some of these tools to
provide information at the level of the physician will help. >> i can offer a couple quick thoughts. i will even go simpler than your unfortunate example, which is that something like 20% of patients today don't even fill the prescriptions that are written for them, often because of cost, by the way. but generally, the doctor doesn't learn that about his or her patient. and so we have already got this information gap which is hurting patients. and so, if you have -- if you are in more of an integrated system where your health plan and your providers are connected and coordinated, you get much more of that realtime information sharing, which is so important, because then the clinicians are aware, oh, my goodness, we need to do something for this patient. that's an important linkage. and also, frankly, empowering pharmacists much more. this becomes a state issue, as many of you know, in terms of practicing and licensing and what pharmacists can be
empowered to do. but pharmacists can play a critical role in, again, helping to sort of make the connections and getting right drug, right patient, right time, et cetera. >> ceci, i'll quickly add to that. i think what you point out is a very important thing, and certainly integrated delivery systems, one way to deal with it. things that we can do today and i think people are doing are looking at the pharmacies which typically will fill a medication and then process a claim and then, if the patient doesn't show up, they will reverse the claim and put the medicine back in stock. which can be seen in the electronic footprint of the pharmacy system. so we use information like that to go back to the physician and
say, maybe your patient didn't fill this medication. you may want to have a discussion. >> the issue of abandonment that ceci raised and the 20% is increasingly important. that's the definition of total abject failure of the system. you don't get to patient adherence if you have abandonment. the patient walks up to the counter and doesn't start the therapy. there is recent data, ceci talked about 20%. for generics it's actually 7%. in the polling that's been done recently, it shows because of the affordability issue is an increasing concern moving forward. we have to solve it across the board. in the markets for generic is available you have one-third -- two-thirds more likelihood that the patient will start and stay on their therapy. so that's an important distinction. >> i am afraid we are out of time. i apologize. i thank the panel for the spirited discussion, and thank you all for coming. [ applause ]
that brings us to the end of our program. i would like to thank you for joining us. don't forget your surveys. and also, the full video will be available on thehill.com later today. thanks so much. have a great day. c-span's "washington journal," live every day with news and policy issues impacting you. coming up tuesday morning. minnesota republican congress man eric paulson discusses the opioid epidemic. and david hawkings of cg role
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